Manchester City and the Premier League have reached a settlement in their dispute over the rules that govern commercial deals.

City have accepted the rules governing associated party transactions (APT) are valid and binding, with both parties agreeing to terminate legal proceedings.

The club had mounted a legal challenge against the Premier League, claiming new rules were “unlawful”.

“Neither the Premier League nor the club will be making any further comment about the matter,” a joint statement said.

City are also awaiting the outcome of a landmark disciplinary hearing after being charged by the Premier League with more than 100 alleged breaches of financial rules for which the club deny wrongdoing.

Last year, an independent arbitration panel found against aspects of the league’s APT regulations after a lawsuit instigated by the club.

The rules were formed by the Premier League to prevent clubs from profiting from commercial deals with companies linked to their owners that are deemed above “fair market value”.

In November 2024, a majority of top-flight clubs voted to approve amendments to the APTs, despite opposition from City.

Background to sponsor rules dispute

The APT rules were introduced in December 2021 after the Saudi Arabian-led takeover of Newcastle earlier that year and were amended in March and November 2024.

The rules were successfully challenged by Manchester City last year.

A tribunal then ruled low-interest shareholder loans should not be excluded from the scope of the APTs, and that changes made to toughen up the regulations also breached competition law.

Following the ruling, City criticised the Premier League’s “misleading” suggestion the regulations could be swiftly amended – and threatened further legal action if there was a “knee-jerk reaction”.

City insisted the league’s proposed changes “would introduce into the rules a retrospective exemption for shareholder loans… one of the very things that was found to be illegal in the recent arbitration”.

They said there should be no vote on changes before a further determination by the panel.

However, the Premier League voted through the amendments despite opposition from Newcastle United, Nottingham Forest and Aston Villa, as well as City.

The Premier League and City attended a two-day hearing earlier this year to make submissions in relation to the impact of the original ruling.

They have now reached a settlement that will bring to a close a long-running legal battle that cost both sides millions of pounds in legal fees.

‘Peace at last in bitter dispute’ – Analysis

This peace deal concludes a long, bitter and very costly legal dispute between the Premier League and its most successful club over the past decade..

League officials – along with most of their clubs – will be relieved that APT rules they insist are essential for maintaining competitive balance and fairness are no longer under threat at a time when regulation has never appeared so difficult.

And now it is no longer challenging the rules, Manchester City are set to re-submit a proposed new sponsorship deal with Etihad Airways. It was one of two Abu-Dhabi-linked deals originally blocked by the Premier League in 2023 for not being fair market value, sparking City’s lawsuit.

Despite some reports suggesting that City have been given assurances that the deal will be approved, BBC Sport has been told that it would still be subjected to a fair market value assessment by the Premier League board.

Meanwhile, despite the settlement announced today, there is no suggestion from either side that this will have any impact on the higher-profile, ongoing saga of the Premier League's disciplinary case against City for more than 100 alleged breaches of its financial rules.

City deny wrongdoing in a case which saw an independent commission hearing conclude nine months ago, but which is yet to produce a verdict. (BBC)

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